Q

#8 Today, 13:33
rekha0303
New Member Join Date: Jun 2010
Posts: 3

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Hiya

This years sales are £4,000,000

Growth trend is expected at 20% per annum

Because of the growth it means that now the year sales will be forcasted at 120%

New Sales = 120% * £4,000,000 = £4,800,000

Because of the 4 quarters divide £4,800,000 by 4 = 4800000 / 4 = 1,200,000

Thus

Q1 + £30,000 + 1,200,000 = +£1,230,000
Q2 + £50,000+ 1,200,000 =+ £1,250,000
Q3 + £135,000+ 1,200,000 =+ £1,335,000
Q4 - £215,000+ 1,200,000 =+ £985000

Important point for Q4 in this question~ remember there is a minus sign in front of 215000 so instead of adding it to the 1200000 subtract it from 1200000 to get 985000

Check: 1,230,000 + 1,250,000 + 1,335,000 + 985000 = £ 4,800,000

Point to remember:

Growth~ add the given % to 100% to represent the new value for sales

Negative effect to trend ~ deduct the given % from 100% to represent the new value for sales

Please note that some answers provided by Kaplan are completely wrong!!!!

Cheers

Rekha